Category Archives: Homeowners

Do you know your insurance facts? Can you pick out the insurance myths that seem to crop up time and time again? Here is a quiz that insure.com gave to 2000 respondents, and the results may surprise you. I put the 10 questions below for you to answer, and you can click the link at the bottom to see how you did. If that isn’t good enough, there is a gender breakdown! That’s right, among the 2000 respondents, women did substantially better on this quiz than men! Leave your ego at the door guys, or prove you ACTUALLY know what you THINK you know…

But what is the point? The point is that we all make decisions based on perceived facts. We don’t ask questions because we mistakenly think we know the answers, and because of that, we miss out on some important things in life. This is not just about insurance, it is about a world that we think we know, but that really is full of mystery.

But today, let’s focus on the insurance side of things. Decide if these 10 statements are facts or myths, then click the link and see how you did. Ready?

1: I should buy insurance coverage for my house based on its real estate market value.

2: Red cars cost more to insure because they get pulled over for speeding more.

3: If I cause a crash with extensive damages to others, my auto insurance company can cancel me immediately.

A big part of writing a blog is finding useful things to impart, and to impart those things in a unique way. Sometimes, others offer information in a way that is pretty excellent, though, and pointing you to that information can be as useful as reinventing the wheel.

We have spoken about the relationships Levitt-Fuirst has with our insurance carrier partners, most notably in our “Why An Independent Agent?” piece. These partners have amazing information available to them, and some of that really fits with what we are trying to impart to you in this blog. For example?

The Hartford. the Hartford started out as a fire insurance company 200 years ago, and continues today to lead in fire safety and prevention – a major cause of loss to homeowners since, well, since the beginning… They recently created this 28 page fire prevention and safety guide that should be mandatory reading for all homeowners. Today’s blog? Today I am hoping you will take the time to read this Hartford booklet to have a better understanding of fire risks, to reduce those risks, and to survive a catastrophe. As is always the case, the safety of you and your family are the most important things – the rest is replaceable.

If you own a home, please read this booklet. It will give you insights and reminders, conversation starters and a fresh perspective. An ounce of prevention, as they say…

It has been a few weeks since we discussed the process of buying a home. If you recall, part 2 left us at the contract signing. This is the point of no return, assuming things go well with the rest of the process. Part 3? Part 3 takes us from Contract to Closing.

If you thought the stress ended with the contract, well – who are we kidding, you knew the stress didn’t end there! With a house, does the stress ever really end? Still, that contract signing was a really nice milestone in the process, as it means that everyone agrees upon the basics of the sale. So, what happens between contract and closing? And what is involved in the closing itself???

From Contract to Closing

A few things happen during this time. From the buyer’s perspective, there are at least three things that you can expect.

First, the house must appraise to value – the bank will send in an appraiser to make sure the loan is not larger than the appraised value of the house. This can take a few weeks, to get scheduled, completed, and a report to be filed. If the house does not appraise to value? I have heard where a request was made for another appraiser to make a report, with success. In the end, this step is essential – the bank does not want to have a loan outstanding that exceeds the value of the property… Read more about what they look for here.

Secondly, a title search must be done on the house to verify the title is clear. Are there any liens on the house that went unstated? The title search will find the problems, and the title insurance (one policy for the bank, and if you are smart, one for you) will protect you should something come up down the road. I am no title expert, but you can read more about them here. One last note: Due to the Coop ownership structure, title insurance is generally not taken. Because there is no real property changing hands, only shares, title searches are not generally done. Note that there IS title insurance called Coop Leasehold Insurance Policy. This article is from 2006, but gives Coop buyers some insights you might otherwise overlook…

Next, you need to have homeowners insurance. Some banks will offer to get the insurance for you, but as you might expect, I think a broker is the way to go. The price is usually pretty reasonable, given the size of the investment, and your trusted advisor (Levitt-Fuirst???) can guide you to a company that is right for you.

Finally, you will be asked to send 4,827.5 documents to the bank to verify just about everything you have told them up to this point…. It can be exhausting, but here is my advice to you. Collect everything ahead of time! You need tax records, bank statements, copies of checks and deposits, statements from every fiduciary account you hold, proof of employment, and and and and and… Be patient, be close to a scanner, be prompt and be responsive. Don’t hold things up, get your paperwork in!

At Closing

Congratulations, you made it! The house appraised at or above the loan value, the title came back clear, and you somehow managed to appease the bank with 4,827.5 documents proving you are a good risk with regard to this very big loan. And here you are, the date of closing.

On the morning of the closing, you will do a walk through to make sure the house is still in good shape (the owner is required to keep the property in good shape). Remember those things you asked the seller to do? The concessions? Make sure they were done. Make sure things seem to still work, and the place is as you expect it to be. Even the yard should be kept in the same shape as when you decided to buy.

Now, it is off to the lawyers for the signing! And signing. And signing… You will generally be required to bring a bank check to pay for those large closing costs we talked about (your lawyer will give you the amount and the HUD statement of what makes up that amount), and you should bring your personal checkbook in case there are some outstanding items that got missed. After signing and reading several hundred documents, you will be given keys, and off you go! Whew.

On a personal note, buying a home is a very exciting thing. When you buy a car, that excitement comes when you drive off the lot. When you buy a home, the excitement is when you drive into your driveway for the first time. After all this time, you finally reached your goal. Congratulations!

Here in the region surrounding New York City, we have an abundance of both Condos and Coops. In New York City limits, Coops account for 85% of all available apartments. The buildings look the same on the outside, but the ownership structure is very different. What do you need to know before buying an apartment in our area? Let’s take a look at the Condo and Coop situation.

Condos and Coops, Coops and Condos…

We will start simply with the condo, and go from there. A Condo is like any piece of real property you may own, such as a house. You are buying a parcel of property, and that apartment is considered property in your name. A Coop, however, is a bit different. When you buy a Coop, you are actually not buying a piece of property. Rather, you are buying stock in the corporation that owns the apartment, and leasing the apartment from the Coop.

A Condo owner is responsible for their own real estate taxes and its share of the common charges associated with the maintenance of the property. A Coop owner, on the other hand, pays monthly maintenance to the building corporation for maintenance, building operation, property taxes, and underlying building mortgages.

Here are a few more things to think about…

Buying a Condo is a contract between a buyer and a seller, but buying a Coop requires the board approval, and the process can be more time consuming and demanding. Horror stories abound, so be prepared with every financial document they request to make the process go smoothly.

A condo generally has a higher value than a comparable coop, but closing costs may be higher with regard to title insurance and other taxes. Also, monthly fees are generally higher with a Coop, due to underlying mortgage payments which are included (based on shares).

Coops may require a larger down payment, then a comparable condominium, often 20%, causing a barrier to entry for some home buyers.

Sub-letting your apartment is far more difficult in a Coop, due to board approval and financial requirements.

Insuring your Condo or Coop

Insuring your Condo OR Coop is very different than insuring your free standing home. The building itself will have a policy that covers the property’s common areas, and your insurance is generally meant to cover anything from the “walls in”. This unique situation is why a special form was developed, the HO-6. Freestanding homes utilize the HO-3 form, and renter utilize the HO-4 form – the HO-6 is designed for both Condos and Coops, and their unique requirements.

One last note regarding insurance. Take a good long look at the association documents, just to be sure you know what the association policy is covering. It is always better to go in knowing all the facts, than to be surprised when a claim happens.

So, if you are buying a Condo or a Coop, be it in New York City, Westchester, Connecticut, or anywhere else for that matter, do your due diligence beforehand with regard to your homeowners insurance policy. Give us a call, we would be happy to answer any questions.

Last week, we covered the steps you should take before house hunting. That is the logical course, and one that will make your life easier. It is not the only course, however, as circumstances are constantly changing. Me? I found a place that met needs I didn’t really know I had, and did the rest of that stuff after the fact – which is to say, there are no hard and fast rules. Preparation is always preferable to reaction, though…

As for finding a house, there are so many ways and places to look, it would be crazy to mention all of them. Local realtors are always a great option if you know where you want to buy. For a broader view, I recommend Zillow, a site that aggregates all the listings in a region, and allows you to enter criteria to search. This was what happened with me – a year after looking, an email from Zillow came in with a great little house in my budget, in the town I wanted to be in. From there, I contacted a realtor I talked to the previous year, he suggested a mortgage broker he liked, they both suggested a lawyer that was reasonable, and we were off to the races.

With your new-found understanding of all the fees, taxes and down payments (having read Part 1), you will be in a great position to make this process go smoothly. I made some mistakes, and though it didn’t derail things, it did make my life more stressful. Learn from me, and get the facts up front…

Once you have the place you want, it is time for the negotiations. For simple sales, you can use the same broker as the seller, but there is something comforting in having someone that only has your interest at heart. When it comes to requests to the seller for changes you want made, it is nice knowing that you have someone in your corner making those requests. Same with the negotiation on price – you can be completely honest with someone that is working for you, and let them do their job. “Offer $XXX,XXX, but I would be willing to go to $XXX,YYY if it comes down to it” is something you can tell your realtor, but you don’t want to share with the seller…

The negotiations are a dance that can be stressful for you, and for the seller too. Remember, the seller has needs too. They have to have a place to move to, they need a certain sale amount to have it make sense, they have a mortgage to pay off and they have their own fees associated with the sale. Add to those things the fact that there are other buyers that may be bidding on the house or apartment? You could get lucky, as I did, or you can have house after house not work out for you, as many others do. Me? The house I saw is the house I bid on, is the house that I am buying (fingers crossed for a few more steps in the process). It isn’t always that easy!

Once you DO have an offer accepted, there are more steps before a contract is signed. Now is when you have the home inspected (PLEASE LET THE ROOF BE GOOD, PLEASE NO TERMITES, PLEASE NO WATER IN THE BASEMENT!!!). Find a good inspector to go over the place top to bottom, from roof to basement. The inspector will make notes on things that should be changed, and these will be listed as concessions from the seller – things they will do prior to closing. These things will wind up in the contract, making those updates binding.

Quick question: is the basement finished, does it have a bathroom, or a laundry room? Any additions? Is there a new deck? Any real upgrades to the property would require a permit from the city – if they were done without a permit, you may be buying a home with a potential fine and back taxes owed. Your lawyer can assist in this, just be sure to make a note of any renovations that have taken place to ensure that those renovations were done by the book.

Whew, are you tired YET??? Well, at least we have made it to signing the contracts. This contract will have all the stipulations in it that you requested and were agreed to, along with selling price and other key pieces of information. This is THE step – the point of no return. Once you sign this form, and the seller signs and returns it to your lawyer? You are on the hook to buy the house. To not do so is to forfeit the large deposit you sent with the contract for escrow. Essentially, the contract states that if all goes well with the appraisal, the title search, the repairs, and the mortgage, you must buy the house or forfeit the money you put in escrow (perhaps ¾ of the total down payment).

So, you signed the contract in 22 places? You had your lawyer send it, along with your large check, to the seller’s lawyer? The seller signed the contract in 22 places, and returned it to your lawyer? Boom, you are in contract. Congratulations, part 2 is complete. You have a framework for buying a house, and in part 3, next month, we will discuss getting from Contract to Closing. Oh, the fun is just beginning!

Sometimes managing a loss and resultant claim is all about the big thing, the big loss, and the true hardship. Sometimes it is something simpler, the smaller things that make a difference. During a repair of a damaged wall in an insureds residence, painting was required.

Most homeowners’ property coverage is written on a “Replacement Cost” basis, which relates to the concept of “making whole” as we discussed in a previous blog. Replacement Cost means you are paid on a covered claim with the goal of replacing the lost or damaged property with like, kind and quality materials at current prices without the application of depreciation. Replacement Cost became the norm because the old way, Actual Cash Value*, was creating a hardship with policy holders when a claim was paid. That 5 year old couch might have an actual cash value of $90, but replacing it could cost 10 times as much!

So, back to our client with the wall that needs painting… We let the insured know that as a part of Replacement Cost, the entire room was eligible to be painted, because making them “whole” meant the entire room needed to have a matching color.

You rely on your insurance agent to assist you when you have a claim, be sure you trust the claims department to be knowledgeable, interested, and thoughtful. I know those are the words I would use for Levitt-Fuirst’s claims department…

*Note: Most of your auto policies are on an actual cash value basis, with claim payments being limited by the blue book value of the vehicle. There is often a rider for leased vehicles that raise the claim payment on a total loss to cover the remaining lease payment, but in general, this is the industry standard. Classic Cars, you ask? Agreed Value, but you probably read that in this blog, posted a while back!

I am in the process of buying my first house. It is an exciting time of looking forward to a new life filled with ideas, hope, and of course, terror. I am starting late in the game, having lived in Manhattan through my prime “Home Buying Years”, where $700,000 buys you a spacious (Almost 1000 sf!) one bedroom in a good building, and where even that one bedroom was outside my budget. So, time passes, circumstances change, and new opportunities arise. Here I am, several years later, faced with something I had only conceptually thought of before. I felt it might be useful to some of you out there if I took you along for the ride, because if you are looking for your first home, you might learn from my mistakes.

The Insurance Piece

Clearly, I work for an insurance agency, and we generally discuss insurance in this blog. Let’s get that out of the way right here. Homeowners insurance? You need it. It is pretty reasonable in the big scheme of things, and you should have an expert place the policy with a good carrier that can be counted on in the case of a loss. You want to be sure to have a valuable articles policy for your unique items (art, wine, jewelry), but you knew that from our previous blogs. Next, you need to know what your flood zone is, because you have to budget flood insurance if you are in a higher risk area. Get the details on the town and the lot and its history before making an offer, and read our flood blog for additional information. Also, did you know that your auto insurance will be impacted too? I am moving from the Bronx, and my auto insurance will dip a few hundred dollars after moving to a quiet Westchester hamlet. It is a nice little bonus, and offsets some of the difference between renters and homeowners insurance. Call us, Levitt-Fuirst has a wonderful personal lines staff, and we want to be there for you when you are ready to buy that first (or second or vacation) home.

So, that was the insurance piece! To be honest, in the big scheme of things, the insurance part is easy if you have a trusted insurance advisor guiding you. It is all the other stuff that rattles your teeth and makes you question getting up in the morning. Today I am going to give a few tips on preparing you for your house search, because walking into this process with eyes wide open will help you keep your sanity!

How Much House?

Before you buy a house, you have to know what you can afford. Seems silly, but this is where so many people (like me) miss essential bits of information that truly impact what they can afford. First, your credit is a key piece to this whole puzzle. If you have great credit, you are ready to move on to the next step. If you don’t, taking a year to improve your credit might be wise. The rate you pay for your mortgage, for the next 30 years, will be directly related to that 3 digit number! Taking steps to improve your credit for a year might just be the best financial decision you can make. Also, did you know a better credit score could improve your insurance rates as well?

Once you are set with your credit score, it is time to evaluate the actual dollars and cents. Your ongoing costs include the cost of the mortgage itself, the estimated cost of the taxes for the town you will be living in, and the cost of the PMI, or Mortgage Insurance, if you are putting down less than 20%. Up front, you have the down payment, from 5% to 20% for a standard “conforming” loan, and legal fees and closing costs, which can add up to 4% to 7% of the total cost of the property. That down payment and closing cost figure is all right up front, and constitutes a hefty investment for a prospective new home owner. The numbers can be an eye-opener in this region, where $500,000 is considered a reasonable home price…

With all of this information, you should have a better idea of what you can afford. Taking that conceptual number, it is time to get pre-approved for a loan. If you are serious about buying a house this is where the rubber meets the road. This is where you will find out what sort of rate you can expect, which will clarify how much house you truly can afford. You can get these mortgage quotes from an institution you regularly use or have a relationship with, or you can shop for mortgages using the various tools available, such as Quicken Loans or Lending Tree. However you choose to get your indication, doing so before you start your house hunt is an excellent idea – when you find your perfect home, you want to be able to move quickly to secure it.

Are you tired yet? All of that, and we haven’t even looked for a house? No wonder this will take a blog or two to cover… Next week, Part 2 will discuss finding your home, and the tools that will help you do it. Finally, we will discuss the time between contract signing and closing, and which wine regions offer the best wines for keeping you sane during this process.

There was a time when the idea of a hurricane in the tri-state area was not taken seriously. “A hurricane? In New York? Nope, not going to happen”. Until a few years ago, we were all pretty sure that any hurricane that ran up the east coast would weaken, reduce to a fraction of its former self, and become a glorified late summer storm. Sandy set us straight, though, didn’t she? A perfect combination of weather events allowed for a devastating landfall, as high tides rolled across Manhattan, trees tore down power lines across the region, historic covered bridges were washed away across Vermont, and much of the region went dark.

What did we learn? Hopefully, we learned enough to be better prepared the next time. We learned not to assume. We learned that even unexpected things happen at unexpected times (A hurricane in OCTOBER???). Hopefully, we also learned that we have to be smart and proactive to minimize the impact a storm like this can have on our lives.

From an insurance perspective, there are quite a few things you can do in preparation. Be sure your home is properly insured, your auto has comprehensive coverage (a co-worker here at Levitt-Fuirst had her car flattened by a tree during Sandy), and that you have documented your valuable articles in case there is damage to your home and its contents. Flood insurance was a key coverage for many during Sandy, if you haven’t already, give yourself a flood primer in our piece from July 21st.

Outside of the house, there is much you should do as well. Another of our posts mentioned keeping your trees trimmed for the summer, but this is really a 4 season rule. In the summer, we have regular heavy storms and occasional named storms that come through, and ice storms, snow storms and blizzards wreak havoc from October through April – it isn’t easy being a tree! Keep them pruned and healthy to minimize the damage they can cause to power lines, roofs, and other structures on your property. Also, be sure to clear your lawn of anything that could be blown by the wind – these can be dangerous projectiles in a big wind event.

Inside the home, close your windows, turn up your refrigerator and freezer to the coldest settings in case of a power outage. For short term emergencies, you should have supplies on hand such as plenty of canned food, water, and cash. After 9-11, myself and many other New York City residents were prompted to create Emergency Kits – first aid, food, money, water, flashlights, batteries, blankets. These were important items for the horror of those days, but they also would come in handy during any storm or event that takes out your power for more than a day or two.

Do you have a plan for those occasions when the power goes out for an extended period of time? Sandy saw homes without power for weeks! In those longer term power-loss events, perhaps a generator would be a worthy investment? Make sure to locate friends or family that would welcome you should you need to relocate, and make an evacuation plan. Be sure to gas up your cars! I think we all learned that the hard way – with major storms come major gas supply problems. If a storm is on the move, gas up your cars and use them as little as possible – when you need to get out of town, that foresight might be the difference between securely arriving at your destination, and using your last fumes searching for an open and operational gas station.

For so many years, we were lulled into a false sense of security that our region was secure from large scale events, be it hurricanes, terrorism, or huge regional blackouts due to a domino effect of power station problems from Ohio to New York. The idea is not to know exactly what will come next, but rather to be as prepared as possible for ANYTHING that could come next. Simple steps and precautions can help you as you endure events that are beyond your control, protecting yourself and your family, and speeding your financial recovery in the face of damage to your home or property.

Its summer time!!! You’re up in Greenwich or Armonk and everybody is swimming, sunbathing and grilling. Laughter is in the air and everybody is having a grand old time. Unfortunately, there is another side of that coin – one that includes storms and risks and dangers that threaten your summer fun. So how do increase your odds of this coin landing on the side of laughter and joy? You take the necessary precautions, that’s how. Allow me to give you some advice on some of the things you can do to stay safe.

Open Pools – You may not want to hear this but drowning is the leading cause of death among children under the age of 4. It is also the third leading cause of death among children overall. What can you do to prevent this? Install a 4-sided fence that is at least 5ft high. Another thing you can do is talk to your pool expert to find out which pool cover would be best suited for you.

Long branches – When you prune your trees it’s not just for the trees health or for cosmetics, it makes it a safer environment. Tree branches can obstruct visibility and when a storm comes around it can break the branches and they can fall on your car, house and power lines. Hire a professional arborist to trim your trees.

Grill Fires – How can we reduce the chances of a grill fire? All you have to do is keep the grill 10 feet away from anything flammable…easy huh!

Clogged Gutters – Doesn’t sound like a big deal but when they’re clogged they can be weighed down by water and debris and that can cause them to pull away from their attachments. This creates opportunities for ants, mosquitoes, and rodents to enter your home. Cleaning your gutters out twice a year is what’s recommended.

As much as we at Levitt-Fuirst are in the business of providing insurance for the protection of your home, valuables and life, we also want to promote prevention of loss, which is why we offer tips on both. If, with a few small preventative measures, you can save yourself from a loss – why not try it. Don’t think of it as an either/or proposition – “If I do these preventative measures then I don’t need insurance, or if I have insurance then I don’t have to prevent accidents” – think of it as a symbiotic relationship. They can coexist peacefully all under one roof – prevention AND protection. But Protection likes cheese on his burger.

If you are anything like me, a working mom with 2 kids that need shuttling around, animals that need taking care of, and a house that needs to be cleaned regularly (ostensibly), you may have toyed with the idea of hiring someone to help you with all of that – be it a nanny or
housekeeper, live-in or live-out. And when I say “toyed with the idea”, I mean lay curled up in a ball, whimpering, while looking at the dust bunnies as they multiply at amazing rates (you know what they say about bunnies) chanting over and over “I need help, I need help…”.

So, since this is mainly an insurance, informational blog, I will not extol the virtues of laying by the pool while Jeeves brings me a fruity little concoction with a paper umbrella, as my house is being cleaned and my children are being minded and all is right with the world…..wait, one more minute….okay, I’m back and ready to school you in the ins and outs of domestic help and the workers’ compensation insurance that might be required. Remember that a workers’ compensation policy not only protects the employee but the employer as well. There are different rules in different states, so my main advice is to check with your insurance broker to find out exactly what your state’s requirements are and the best policy to go with. I went to Donna Boonjamalik in the Levitt-Fuirst Personal Lines dept. and this is what she told me:

“Domestic Workers include Chauffeurs, nannies, home health care workers, nurses, baby sitters, cooks, housekeepers, butlers, companions, gardeners and other types of regular employees working in a private household. We would normally suggest a Workers’ Comp Policy if an insured has hired a “regular” person to perform a task for hire on a regular basis Full or Part Time such as:

There are 2 rates. Full Time and Part Time Rates and they are based on Per Capita ( how many ) Employees there are.“Regular Employees” are not covered under the Homeowner’s Policy. The Homeowner’s Policy provides Workers’ Comp for temporary work, such as:

1) Hiring a painter to paint your house 2) Hiring a roofer to put on a new roof 3) Hiring a landscaper to plant trees & bushes

Only if a Domestic Employee works 40 or more hours a week are they required to have Workers’ Comp policy. A policy for Part Time Domestic Help is not required but always encouraged to protect both the employee and the employer.”

Now that you are better educated, I can slip back into my fantasy world….. a beautiful, sunny day by the (hypothetical) pool, visions of my perfectly minded children being taught “The Sound of Music” soundtrack by a cross between Julie Andrews and Mary Tyler Moore, my house sparkling like 1,000 diamonds and smelling like (I’ll be darned) a pine forest, and the ever-loyal Jeeves standing by with my pool-floaty…… and the peace of mind that all is covered by the insurance that I need.